Coyote Blog

Kevin Drum quotes favorably from Chad Terhune at the LA Times

Some insurers are chasing after much smaller customers with new plans designed to limit employer payouts for big claims using what's called stop-loss policies. This guarantees that businesses won't be responsible for anything over a certain amount per employee, perhaps as low as $10,000 or $20,000, with the rest paid by an insurer. Regulators and health-policy experts say this arrangement undercuts the notion of self-insurance since employers aren't bearing much of the risk, and it allows companies to circumvent some state insurance rules.

"This is not real self-insurance. This is clearly a sham," said Mark Hall, a professor of law and public health at Wake Forest University who has studied the small-business insurance market. "Regulators have good reason to be concerned about the potential harm to the market."

Self-insurance is attractive for many reasons, particularly the prospect of lower costs. It's exempt from state insurance regulations such as mandated benefits, granting employers the flexibility to design their own benefit package and the opportunity to reap some of the savings from employee wellness programs. A federal law, the Employee Retirement Income Security Act, or ERISA, governs self-funded plans. Some aspects of the Affordable Care Act do apply to self-insurance, such as the elimination of caps on lifetime benefits and some preventive care at no cost.

Drum agrees

Yeah, it's a scam.

In a reasonably sane world, and in all other contexts outside of health care, insurance is obtained at relatively low prices to cover only catastrophic events that would be potentially bankrupting.  Car insurance does not cover oil changes and home insurance does not cover oven repairs.  So why is it that Drum is arguing that we should ban insurance policies that only cover catastrophic losses and not routine costs?   After all, the second sentence in the first paragraph from the LA Times sure seems to define exactly what insurance should be (and is similar to my personal policy, which has a high deductible attached to a health savings account).

The problem is that when Drum and the Left use the word "health insurance" they are actually referring to a bundle of four items

• Traditional catastrophic insurance against large, unexpected, bankrupting charges
• Third party payment / capitation for entirely routine and expected health expenditures, from physicals to contraception
• Crony payoffs for favored constituencies, mainly via mandated benefits rules.  This payoff may be to consumers, e.g. young women like Sandra Fluke who have the rest of us pay to maintain her sex life; or it may be to corporate cronies, who are able to get their particular device or procedure or service included in the mandated benefits, guaranteeing a large stream of customers who don't care a bit what the product or service costs because it is now paid for by a third party.
• Social engineering, in the form of embedded incentives to promote certain favored behaviors like seeking preventative care or eating better.  And when the government is paying the bill, the policy becomes a Trojon horse for government micro-management of our lives in the name of health cost reduction.

The second item seems to be a paradigm embedded in the mind of everyone in the US today, that health plans somehow need to cover every imaginable health-related expense.  Outside of an HMO model where these expenses are managed, this is a recipe for a cost explosion.  If we all had pre-paid car policies that bought our cars for us with low deductibles, no one would be driving a seven-year-old Nova.  The third and fourth items are Trojan horses for state control and cronyism that politicians are desperate to preserve.   So it is not surprising that efforts to roll back insurance to just be, well, insurance is met with anger by would-be authoritarians.  The question is, why do we listen to them?

Kevin Drum and Ezra Klein both complain that Congress is letting America's highways fall apart by not raising the gasoline tax.  They complain that current gas taxes are no longer high enough to cover costs, as the Federal highway trust fund is empty.  Apparently, Congress and the President were always blithely happy to raise the gas tax to whatever it needed to be to cover costs, and now this current Congress is departing from the historic norm:

We used to have a straightforward way to fund infrastructure in this country: the federal gas tax. In 1956, President Dwight Eisenhower raised the tax from 1.5 cents a gallon to 3 cents to help pay for the creation of the interstate highway system. In 1959, he increased it from 3 cents to 4 cents. In 1982, President Ronald Reagan raised the gas tax to 9 cents. In 1990, President George H.W. Bush raised it to 14 cents, with half of the increase going to reduce the deficit. In 1993, President Bill Clinton raised it to 18.4 cents.

In other words, from 1956 to 1993, there was a bipartisan consensus on the federal gasoline tax: Both parties agreed that it occasionally needed to be raised in order to help pay for the nation’s infrastructure. But since 2000, there has been a bipartisan consensus against raising the federal gasoline tax.

But here is what happened since 1993:  Roughly a third of highway taxes are diverted to local mass transit and other oddball non-highway projects.  Simply devoting all the highway trust fund to, you know, highways would add an effective 6-7 cents to the gas tax money without actually raising the tax.

Here is what is going on:  The Left loves mass transit projects, particularly urban rail.  Of all government transportation projects, these have by far the highest cost per passenger mile of anything we do, so diverting money to these projects reduces the bang for the buck but the Left loves these projects for social engineering reasons I will discuss in a post soon.

The Left knows that these transit projects will not stand up well in the appropriations process.  Kansas taxpayers are not going to be happy about paying for another couple miles of the LA subway system.  They will ask, rightly, why local urbanites can't pay for their own damn transit projects if these projects are so great.  But taxpayers generally support tax hikes for highways. So what does a politician on a transit mission do?  He sells the gas tax to the public on it being dedicated to highways.  Then he switches the money away from highways to transit.  This leaves highways falling apart.  So he can again go to taxpayers asking for money, ostensibly for highways, but of which a good portion will eventually be siphoned off to transit (and squirrel bridges and whatever).  Repeat.

In effect, calls for raising the gas tax are NOT to repair highways.  This is a bait and switch.  Gas taxes are sufficiently high enough to fully fund highway work if it was all applied to highway work.  Proposed increased in gas taxes are needed to pay for the continuing diversion of highway funds to egregiously expensive transit projects.  Congress is right to stop this shell game.

I have written a number of times on the silliness of food miles and the locavore movement (here and here and here).  For some reason the energy and resource intensity of foods is being judged merely on one component - transportation of the end product - which actually is only a tiny competent of food costs (and thus their resource use).  Is it really more environmentally sensitive for us Phoenicians to grow our corn in the Arizona desert, where soils are unproductive and water must be imported from hundreds of miles away, rather than have it grown in the fertile soils of Iowa and trucked in?

Someone in the media, at least in Australia, finally notices:

TWO brands of olive oil, one from Australia, the other shipped 16,000 kilometres from Italy, sit on a supermarket shelf.

Most eco-friendly shoppers would reach for the Australian oil. But despite burning less fossil fuel to get here, it may not be better for the planet.

Contrary to popular belief, ''food miles'', or the distance food has travelled before we buy it, is a poor indicator of our food's total greenhouse gas emissions, or ''carbon footprint''.

More important is the way our food is farmed and produced, and how far we drive to buy it....

It turns out that stuff like economies of scale really matter

''Local food can often have a higher carbon footprint than food from afar,'' says principal researcher Brad Ridoutt.

He says even home-grown vegetables, with ''zero food miles'', do not necessarily have a smaller carbon footprint than those bought in the supermarket.

''With my veggies, I drive to Bunnings to buy fertiliser, and I go away for the weekend and forget to water them, and in the end I only harvest a few things that I can actually eat.

''By contrast, big producers, who can invest in the latest energy-efficient, water-efficient technology, and make use of all the parts of food, can be much more efficient,'' he says.

Of course, transporting food from producer to retailer still burns fossil fuels that release greenhouse gas emissions, in turn accelerating global warming. But freight emissions are only a fraction of those released during production, meaning even imported food, sustainably produced, can have a smaller carbon footprint than local alternatives.

Even the most rudimentary reading of economics should have given greenies a clue.  In commodity products like most foods, prices tend to be driven down to a point that they reflect resources (and their relative scarcity) that went into the product.  The cheapest foods tend to be those that use the least, and least scarce, resources in production.  So buying locally grown food, which often tends to carry a price premium, should have been a flashing red light that maybe this was not the least-resource-intensive choice.

I have written several articles (here and here) outlining why the EPA's method of giving electric cars an equivalent or eMPG is outright fraudulent.  I calculated for the average driver, for example, that the Nissan Leaf's 99 eMPG was actually closer to 36.  Why?  Well, in the EPA's methodology, the science-based Obama administration pretends the 2nd law of thermodynamics does not exist.  Specifically, they assume perfect conversion of the chemical potential energy in fossil fuels to electricity.  They also assume zero transmission losses.  To rework the calculation, I actually used a Clinton-era Department of Energy methodology called well to wheels.

So here is something I thought I would never write:  It turns out the Union of Concerned Scientists agrees with me.  Apparently they have used a similar methodology to rework electric vehicle MPGs based on the fuel mix of the power in different cities, rather than an average national fuel mix as I did it.  I am not sure how they did the analysis - did they use average fuel mix or the marginal fuel, and if the marginal fuel did they assume the marginal fuel at night or during the day?   For example, certain California cities look good with solar use but that does not do anything for typical night time car charging.

Anyway, the problem is hard and I could quibble with how they did it.  But the results are telling - everywhere they looked, even in the hydro-powered Pacific Northwest, the eMPG they got was lower than that of the EPA's.  And in many cases much lower.

If corporations were using the EPA's eMPG methodology, they would be busted by the FTC for false advertising.  It's time to fix this calculation so Fisker Karma drivers can't continue to fool themselves into thinking they are doing something positive for the environment.

I know that those of us who use projection TV at home are a tiny niche (tiny but happy!).  For those who are interested, this guy puts out the best projector reviews I have seen.  I am a big fan of the Epson line and yet again, the Epson (this time the 5010) wins in the mid-price range.  I have the previous version, and it is the ideal  projector for someone like me stuck with a bad room, meaning a non-dedicated home theater where in the daytime there is a lot of ambient light.  Very bright for daytime sports, great blacks and color in movie mode when the room is dark.

I have not tried the new wireless HDMI built into the "e" models of these new Epsons, but it should be a huge boon for projector fans.  Running signal wire to ceiling mounted projectors has always been a pain, especially as the standard has shifted about three times since I first wired my house  (composite to S-Video to component to HDMI).  But HDMI is particularly hard, since the HDMI standard was never really spec'd for long runs of wire.  It is very dicey getting a reliable high-frequency signal (ie that needed for 1080p 3D) through HDMI cables that may be more than 25 feet long.

This is just nuts.

Across the United States more than 2,700 companies are collecting state income taxes from hundreds of thousands of workers – and are keeping the money with the states’ approval, says an eye-opening report published on Thursday.

The report from Good Jobs First, a nonprofit taxpayer watchdog organization funded by Ford, Surdna and other major foundations, identifies 16 states that let companies divert some or all of the state income taxes deducted from workers’ paychecks. None of the states requires notifying the workers, whose withholdings are treated as taxes they paid.

General Electric, Goldman Sachs, Procter & Gamble, Chrysler, Ford, General Motors and AMC Theatres enjoy deals to keep state taxes deducted from their workers’ paychecks, the report shows. Foreign companies also enjoy such arrangements, including Electrolux, Nissan, Toyota and a host of Canadian, Japanese and European banks, Good Jobs First says.

Why do state governments do this? Public records show that large companies often pay little or no state income tax in states where they have large operations, as this column has documented. Some companies get discounts on property, sales and other taxes. So how to provide even more subsidies without writing a check? Simple. Let corporations keep the state income taxes deducted from their workers’ paychecks for up to 25 years.

Kentucky, where I have operated for over 10 years, seems to be the originator of this silliness.  I have always wondered why there is not an equal protection issue with such subsidies given to a chosen few companies but not to others.

I wrote years ago about such relocation subsidies being a prisoners dilemma game:

I hope you can see the parallel to subsidizing business relocations (replace prisoner with "governor" and confess with "subsidize").  In a libertarian world where politicians all just say no to subsidizing businesses, then businesses would end up reasonably evenly distributed across the country (due to labor markets, distribution requirements, etc.) and taxpayers would not be paying any subsidies.  However, because politicians fear that their community will lose if they don’t play the subsidy game like everyone else (the equivalent of staying silent while your partner is ratting you out in prison) what we end up with is still having businesses reasonably evenly distributed across the country, but with massive subsidies in place.

To see this clearer, lets take the example of Major League Baseball (MLB).  We all know that cities and states have been massively subsidizing new baseball stadiums for billionaire team owners.  Lets for a minute say this never happened – that somehow, the mayors of the 50 largest cities got together in 1960 and made a no-stadium-subsidy pledge.  First, would MLB still exist?  Sure!  Teams like the Giants have proven that baseball can work financially in a private park, and baseball thrived for years with private parks.  OK, would baseball be in the same cities?  Well, without subsidies, baseball would be in the largest cities, like New York and LA and Chicago, which is exactly where they are now.  The odd city here or there might be different, e.g. Tampa Bay might never have gotten a team, but that would in retrospect have been a good thing.

The net effect in baseball is the same as it is in every other industry:  Relocation subsidies, when everyone is playing the game, do nothing to substantially affect the location of jobs and businesses, but rather just transfer taxpayer money to business owners and workers.

The Secret Service prostitution scandal in Columbia is interesting.  My understanding is that prostitution is legal in the particular area where this occurred.  So in effect we have a scandal here about engaging in a legal activity.  Things that would convert this to an actual scandal in my mind:

• The officers were on duty, or were on call in some way that there are rules about what they can be doing which they violated (in which case I would be more worried about the drinking)
• The call girls were hired with taxpayer money  (it is only legal to give taxpayer money to corporate whores like Solyndra, not Columbian whores).  Bobby Patrino might have survived the adultery scandal if he hadn't paid her with his employer's money.

The most likely issue is one  of representation.  "You can do whatever you want on your own time, but not when you are representing us."    As in most scandals, the biggest crime will turn out to be bringing negative attention to one's employer.  With which I can sympathize.  If these bozos brought negative attention to me when they were travelling on business representing me, I'd fire them in a second.

Which gets me thinking that I could easily get sued for doing so.  I am pretty sure I don't have a rule in the employee manual that says you can be fired after getting in the papers for haggling with prostitutes.    Even though common sense says that by embarrassing the company they are putting their jobs at risk, common sense does not rule the legal world of employer law.   In my experience, the whole legal process is tilted against the employer, with the presumption being that the employer is a rapacious asshole firing people for no reason unless proven otherwise  (you are saying your employees are "at will?"  I laugh at your naivete).   The employee would just say that there was no rule against getting negative publicity for hiring prostitutes on a business trip and that their activity was entirely legal where it occurred.

Since it is entirely unlikely I will add a morality clause to our employee manual, I think I will add something about actions that bring harm or disrepute to the company.

I often write about the large hassles we have to deal with from the government.  Here is an example of the myriad of smaller ones:

We have our campground workers in Florida living in their RV on site.  As one of the amenities we offer them, we have a 120 gallon propane tank on each employee RV site they can use for their cooking and heating.   Unfortunately, the State of Florida has banned connecting propane tanks of this size to a "non-stationary" dwelling.  We were grandfathered for a while, but now we have to get rid of all the tanks.  Our employees can still have little 5 gallon tanks, but instead of having a truck come by once a year to fill all the large tanks, each of our employees must now drive 20 miles into town dozens of times to fill their little 5 gallon tanks.

Thanks state of Florida -- getting rid of a 120 gallon tank at the price of about a thousand extra miles of driving and two or three full man-days of extra time sure seems like a smart legislative choice to me.

I have not really posted on Trayvon Martin (except to comment on NBC's corrupt editing of the 911 tape) because a) high-profile criminal cases don't really have the hold on me they seem to have for many other Americans**; b) I have nothing to add; c) I have a bias that would make my commentary suspect.

But since I am about to post on the case, and may in the future, I should explain the bias.  We have a problem from time to time with campground workers we call the "badge-heavy" syndrome.  They get obsessive about rooting our rules violations.  They stalk campers.  They follow people around.  The spy on campers, looking for violations or crimes to report.  The folks they pick out for such treatment are often chosen because they are somehow different from the employee.

This is just awful for customer service.   It drives me crazy.  It is the absolute first thing we discuss at every training session.  Employees who demonstrate that they have this mentality are generally shown the door as fast as possible.  Government-run recreation facilities actually have this problem much worse, because 1) they give all their park staff a law enforcement title, a badge, and a gun, which tends to just encourage this kind of over-zealous harassment and 2) it is almost impossible for them to fire someone for this type of thing (because in the government employee heirarchy of values, enforcement of and consistency with rules is far more important than customer service or visitor satisfaction).

So this is a hot button issue for me.  And my first thought in this case was that Zimmerman's actions seemed just like those of my badge-heavy employees that I frequently have to fire.  So I am not very predisposed to by sympathetic to him, so thus my bias.

Anyway, keeping with my habit in this case of commenting more on issues at the periphery rather than of the case itself, this post from Ken at Popehat (I believe a former US attorney and current defense lawyer) is quite interesting.  Here is the bottom line:

I'm in a rush, but I can't avoid commenting on the affidavit of probable cause submitted in the matter of George Zimmerman's shooting of Trayvon Martin.

It's a piece of crap....

This is not the worst affidavit I've ever seen — but it's damn close, and the decision to proceed based on it in such a high-profile case is stunning. Cynics may say that I've been spoiled by federal practice, where affidavits are on average considerably more careful and well-drafted, particularly in some districts. But if it takes a high-profile case to highlight shoddy practices in everyday cases, so be it. An affidavit like this makes a mockery of the probable cause process. There's no way that a judge reading this affidavit can make an intelligent or informed decision about the sufficiency of the evidence — even for the low hurdle of probable cause.

** footnote:  I lived in Boulder through the whole Jon Benet Ramsey case.  I believe this was like aversion therapy, the equivalent of your dad forcing you to sit in a closet and smoke three cigars to put you off smoking, which has turned me off high profile criminal cases forever.

Maricopa County will likely settle three suits against Joe Arpaio and Andrew Thomas for about $2 million.  This is on top of nearly $1.5 million in defense costs the County has already incurred in the cases.   Apparently, they consider themselves lucky to be getting off that cheap.

Today on the radio I heard a commercial for a company promising to teach me the exciting art of flipping houses.  I could buy and resell houses up to three at a time in less than 30 days.

I guess I thought it would take a bit longer for this nuttiness to come back.  I do know some smart people who are buying undervalued houses, putting a bit of money in them, and putting them on the rental market.  Converting owner-occupied homes at the bottom of the market to rental properties makes sense to me, particularly since the ones I know are doing it with all equity.

However, I presume the folks tuning into the radio don't have that much equity, and anyway they were explicitly using the word "flipping" in the commercial rather than talking about rental income.  I wonder who is lending on this stuff?  I tried to refi my mortgage about 6 months ago on a 40% LTV but as a self-employed person it was a pain in the ass.  Who's financing house flipping?

(yeah, I know, the answer probably is "all of us, via Fannie and Freddi or some other dumb government program).

Breaking news from California:

The Workers' Compensation Insurance Rating Bureau (WCIRB) made it official and submitted a mid-year filing for a 9.1% increase in the pure premium advisory rate that Insurance Commissioner Dave Jones approved less than six months ago. The proposed July 1 increase follows the 37% increase that Jones approved for January 1 that was hidden by the change in benchmarks for pure premium rates that was made at his request....

The Bureau insists that an increase of this magnitude is necessary to combat the continued deterioration in the claims experience, as well as an uptick in claim frequency in the 2010 accident year. Much of the increase will also go to pay for the higher loss adjustment expenses carriers are incurring fighting liens and litigating permanent disability claims. Projected ALAE costs are up to $11,403 per indemnity claim for the 2011 accident year compared to $10,698 the year before.

A 9.1% increase a half year after a 37% increase is just crazy.  This tends to confirm three issues I have written about before:

1. People are filing workers comp claims as a substitute for or a supplement to unemployment.  Our company has seen a significant increase in people "coincidentally" suffering an injury on one of the last few days, and particularly the very last day, before they are to be laid off.  Only such fraud explains an increase in claims when economic activity is way down, particularly when more dangerous professions like construction employment fell much more than office employment in the recession.  We have also seen, by the way, an increase in frivolous labor lawsuits in CA coincident with the economic decline.  A year ago I had an employee in CA tell me that she had attended a brainstorming session the night before among several of my ex-employees trying to generate ideas for ways to sue our company.  I can't wait for an improvement in the economy when the returns of working are higher than the returns of brainstorming ways to extract money from our company via the legal system.
2. California in general does a bad job of policing workers comp. fraud.  Woe to the employer that actually attempts to question an outrageously suspicious claim.  Last time I tried to do so in CA I got slapped with a lawsuit.
3. All states do a terrible job policing permanent disability claims.  I hire a lot of older workers.  I can't tell you how many people show up at my door trying to be paid under the table because they don't want to endanger their permanent disability by having a record of getting paid for doing very physical outdoor work for us.  They assure me they are 100% capable to do heavy physical labor.  Since I don't pay anyone off the books, they end up finding work elsewhere.   Many of you may not believe such people exist, but I have met a number of folks who consider getting a permanent disability, or at least something a doctor will testify is a permanent disability, the equivalent of hitting the lotto.  I have even been sued by a woman for submitting testimony to the social security administration that might have harmed her chances of getting a permanent disability ruling.  The lawsuit stated that if she was denied the disability payment after I testified that I had seen no evidence of any limitations in what she could do on the job,  that I should be liable for paying her the lifetime amount she would have gotten.  So I wimped out and withdrew my testimony and let the taxpayers pay her rather than farting around with a lawsuit.

The good news:  Andrew Thomas was disbarred, a fate he richly deserved for his amazing prosecutorial abuses, for example bringing fake RICO and bribery charges against a judge to force him to recuse himself from another case in which he was likely to rule against Thomas.  Some of my many articles on Thomas are .

But here is what depresses me:  I believe he was disbarred only because his prosecutorial over-reach and abuse was aimed at public officials.  Similar or worse abuses against private parties are seldom if ever punished.   This is lawyers and public officials defending their own.  When I see this much concern aimed at abuses of private individuals, I will be more likely to cheer.

Update:  I am a terrible editor, but I am sure I did not type "Proprietorial" rather than "Prosecutorial" in the original title.  I think I have some kind of weird auto-correct problem going on.  Though until now I did not know "proprietorial" was a word.

This is terrific, if true.  My fear, of course, is they are getting subsidized through a back door somewhere, but if they really think they can make subsidy-free solar work financially, that's awesome:

Two German solar energy developers are planning to build photovoltaic plants in southern Spain that will earn a return without government subsidies.

Wuerth Solar GmbH & Co. intends to build a 287-megawatt plant in the Murcia area for 277 million euros ($363 million), according to the regional authority. Gehrlicher Solar AG said it plans to develop a 250-megawatt solar park in the Extremadura region for about 250 million euros.

The projects, about three times larger than any European solar plant, may be the first that don’t rely on feed-in tariffs and compete with wholesale power prices. All plants in the region so far depend on fixed premium rates for solar power, which can be several times higher than wholesale prices.

Spain suspended the tariffs on Jan. 27 as part of government austerity measures, threatening the survival of the industry. Tariffs for large-scale solar were set at 121 euros per megawatt-hour. Developers now look to build plants without this support, helped by falling equipment prices.

I can't possibly excerpt this story of the jailing and torture of a woman for buying a box of Sudafed.  Read it all and get totally pissed off.  It makes me want to go to law school and pass the bar just so I can represent this woman pro bono.

I am sure that prosecuting Jon Edwards is a heck of a lot of fun for Republicans, but it is an enormous mistake.  Yes, the guy is a poster child for the hypocritical self-serving jackass that defines exactly whey we hate politicians.  But setting a legal precedent for defining campaign spending subject to crazy election laws more broadly is a terrible idea.  Already, there are prosecutors who, mostly for political reasons, have tried to nail certain politicians for election law violations by labeling certain activities as in-kind political giving.  Down this path lies a world where every institution that offered a candidate's family member or friend a job, or a spot in college, or a book deal, or a consulting contract is subject to ex post facto scrutiny and potential prosecution.

It would be impossible to trace all the ways taxpayer money ends up in the coffers of solar manufacturers like First Solar.  Most of First Solar's money has been made selling panels in Germany to solar plants that, by law, can rape electricity customers with prices 10-15x higher than the market price for electricity.  First Solar also benefits more directly from direct subsidies, loan guarantees, "retraining" subsidies and even government Ex-Im Bank loans to sell panels to itself.  While First Solar vehemently denies it is a subsidy whore, it is telling that when Germany began to cut its solar feed-in tariffs, First Solar's stock price fell from over $300 to around $20.  Just watch day to day trading of First Solar stock, it does not move on news about its efficiency or productivity, it moves on rumors of changes in government subsidies.

Let's look at one subsidy.  In 2010, the Obama administration gave First Solar a subsidy of $16.3 million, ostensibly to help open a new plant in Ohio.  But it is interesting that this private company, which apparently could only raise the $16.3 million it needed by taking it by force from taxpayers, had plenty of money to pay its CEO.  In the 13 months leading up to its $16.3 million taken from taxpayers, First Solar paid its new CEO $29.85 million!  

Rob Gillette, the ousted CEO of First Solar Inc., earned more than $32 million in compensation from the struggling company for his two years of service, according to a regulatory filing Wednesday.

Gillette came to First Solar from Phoenix-based Honeywell Aerospace in October 2009 and was fired by the Tempe-based solar company's board of directors in October 2011....

Most of his compensation came in the three months of 2009 that he worked, when his total compensation, including salary, bonus, stock and options awards and other perks, reached $16.55 million. In 2010 his total compensation was $13.3 million, and last year he earned $2.46 million, which consisted of $763,000 in base salary and a $1.7 million severance.

Yep, they can't scrape up $16.3 million of their own money for a factory but they can find $30 million to give to an unproven CEO they eventually had to ride out on a rail.

By the way, I don't know Mr. Gillette, but I was once an executive at Honeywell Aerospace for several years.  I can tell you that it's a great place to find an executive who is focused on process to manage large complex organizations in a relatively stable business where manufacturing, logistics, and schmoozing large buyers is important.  It is a terrible, awful place to seek an executive for a fast growing business that needs to rapidly shift business strategies and where grinding through the process gets the wrong answer 12 months too late.

Not sure how one ranks blogs by traffic any more in the age of RSS feed readers - I can't remember the last time I actually visited a blog rather than just read its feed.  Never-the-less, Coyote Blog was ranked #71 among libertarian blogs.  I am not sure if that is good or bad.  Traffic here is usually pretty proportional to posting volume, so splitting my time with other blogs, Forbes, and my actual day job of late has probably caused traffic to fall.  I am happy enough with my little niche in the world, tends to get me about the right amount of speaking gigs and media appearances for the time I have available.

Since I am on the subject today of topics my thinking has changed on over the last 30 years, I will link this post from Kevin Drum arguing that we need to make war hard again.  I have not read Rachel Maddow's book and am unlikely to, if for no other reason than style issues, but I must say that I have come around to the point Drum derives from it

If you can get past that, though, there's a deadly serious argument here that deserves way more attention than it gets. The book is, basically, a series of potted histories that explain how we drifted away from our post-Vietnam promise to make sure we never again went to war without the full backing and buy-in of the American public. Maddow's premise is that, just as the founders intended, our aim was to make war hard. Presidents would need Congress on their side. The Abrams Doctrine ensured that reserves would have to be called up. Wars would no longer unfold almost accidentally, as Vietnam did.

And for a while that was the case. ...

Maddow's argument is that we need to start rolling back these changes of the past two decades. When we go to war, we should raise taxes to pay for it. We should get rid of the secret military. The reserves should go back to being reserves. We should cut way back on the contractors and let troops peel their own potatoes. And above all, Congress should start throwing its weight around again. It's fine to criticize presidents for accreting ever more power to themselves, but what do you expect when Congress just sits back and allows it happen? Our real problem is congressional cowardice: they don't want the responsibility of declaring war, but they also don't want the responsibility of stopping it. So they punt, and war becomes ever more a purely executive function.

I am mostly in agreement with this (though I am not sure why soldiers rather than contractors should peel potatoes).  War has become way too easy -- though I would argue that Drum needs to look in a mirror a bit here.  He has been a huge supporter of Obama using executive powers to end-around Congressional opposition on things like the budget.  It's hard for him to credibly turn around and say that this same executive end-around Congress is bad in war-making.   I will be consistent and say it's bad for both.

I have not read the book, so perhaps this is covered, but I would argue that there are external factors driving this change in addition to internal factors.

The current Presidential ability to fight small wars without much Congressional backing is not entirely unprecedented.  Teddy Roosevelt did much the same thing with his gunboat diplomacy.  There were two external conditions that allowed TR to get away with this that are similar to conditions that obtain today.  One, we had a decisive economic and technological advantage over the countries we were pushing around (e.g. Columbia).  And two, there was no superpower willing to challenge us when we meddled in small countries, particularly in Latin America where the major European powers were willing to let us do whatever we wanted.

I would argue that these conditions again obtain since the fall of the Soviet Union, and allow the US to lob around cruise missiles (the gunboat diplomacy of the 21st century) with relative impunity.

I have migrated from being a death penalty hawk 30 years ago to being against the death penalty.  In short,  if I don't trust the government to be able to make decisions on alternate fuel loans, I don't trust them to make life and death decisions.  I grew up in Texas where governors in political races would compete with one another on who has or promises to execute the most people.  Literally they were running on body counts.  This is not an environment conducive to good decision-making.

Further, the death penalty does too much to cut off one's full appeal rights.  A black man in Mississippi in 1965 was never going to get his full Constitutional appeal rights.  Men have been executed that later improvements in racial tolerance or DNA evidence might have exonerated.

Apparently, some of the original supporters of California's death penalty expansion in the 1970's* are now promoting its repeal, and are trying to woo other Conservatives to the cause

Thirty-four years later, another initiative is going on the California ballot, this time to repeal the death penalty and replace it with mandatory life without parole. And two of its biggest advocates are Ron Briggs and Mr. Heller, who are trying to reverse what they have come to view as one of the biggest mistakes of their lives.

Partly, they changed their minds for moral reasons. But they also have a political argument to make.

“At the time, we were of the impression that it would do swift justice, that it would get the criminals and murderers through the system quickly and apply them the death penalty,” Mr. Briggs, 54, said over tea in the kitchen at his 100-acre farm in this Gold Rush town, where he grows potatoes, peppers, melons, cherries and (unsuccessfully, so far) black Périgord truffles.

“But it’s not working,” he said. “My dad always says, admit the obvious. We started with 300 on death row when we did Prop 7, and we now have over 720 — and it’s cost us $4 billion. I tell my Republican friends, ‘Close your eyes for a moment. If there was a state program that was costing $185 million a year and only gave the money to lawyers and criminals, what would you do with it?’ ”

*For those who did not live through the 1970's, it is hard to describe how much the culture was absolutely steeped in the notion that city streets were Road Warrior-esque free-fire crime zones.  The Dirty Harry movies, the Charles Bronson vigilante movies, Escape from New York, the Warriors, etc. etc all promoted this notion that we were too soft on crime and that we had allowed criminals to run wild.

Via unions in Indiana

The Indiana union's lawyers contend that the right-to-work law interferes with the union's free speech rights by stifling the collection of money that helps pay for its political speech.

"In this case, the state of Indiana restricted a channel of speech-supporting finance," the union brief maintains. "The Union legitimately utilizes dues money collected through the agency shop provisions in its collective bargaining agreements, in part, to finance political speech The Indiana Right to Work law prohibits agency shop agreements, and that prohibition restricts a channel through which speech-supporting finance might flow."

Apparently, the nose dive at Best Buy is accelerating.  Watching retail just as a consumer over the last few decades, it seems that whenever a retailer starts going down the drain, they never recover.  Calls are made for more visionary management to reposition the company, but I can't remember any such effort ever working.  The slide may be fast - Circuit City, CompUSA, Borders - or slow - Sears, A&P - but the nose dive never seems to reverse.  The only retailer I can possibly remember really executing a fairly large shift was maybe Gap from just being a Levi's outlet to whatever it is today.   And maybe Radio Shack, which is sort of this zombie you think has been outdated for like three decades but keeps hanging on.

I almost hate beating on the silly folks who run the City of Glendale even further, but they keep screwing up.

One of the reasons I think that city officials like those in Glendale like to dabble in real estate and sports stadiums is what I call the "bigshot effect."  They don't have any capital of their own, and they don't have the skills such that anyone else would (voluntarily) trust them to invest other people's money, but with a poll of tax money they get to play Donald Trump and act like they are big wheels.  The Glendale city council did this for years, and when their incompetence inevitably led to things starting to fall apart, they have simply thrown more money at it to try to protect their personal prestige.

But unfortunately, incompetence generally is an infinite reservoir, and apparently the City has screwed up again.  Years ago, when the City promised the rich people who owned the AZ Cardinals a new half billion dollar stadium, they put a contract to that effect on paper.  Granted, this was a sorry giveaway, spending hundreds of millions of dollars for a stadium that would be used by the Cardinals for 30 hours a year, by the Fiesta Bowl for 3 hours a year, and by the NFL for a Superbowl for 3 hours every 6-7 years.  But, never-the-less, the City made a contractual agreement.

And then, in its rush to be real estate bigshots, the city turned about 3700 parking spaces promised contractually to the Cardinals over to a developer to create an outlet mall (of the sort that has been quietly going bankrupt all over the country over the last few years).  Incredibly, the city did this without any plan for how to replace the parking it owed the Cardinals.  To this day, it has no plan.

Apparently, there were also some shenanigans with $25 million that had been escrowed to build a parking garage.

The demand letter also blames the parking problem on the city's dealings with Steve Ellman, Westgate's former developer and a one-time co-owner of the Phoenix Coyotes. The letter states that Ellman's relationship with the city has been "characterized by a lack of transparency."

The letter raises questions about a January 2011 arrangement in which the city and Ellman equally split a $25million escrow fund that had been earmarked to build a parking garage in Westgate, the team said.

Ellman put that money in escrow in 2008 after failing to keep a promise to the city to provide a set amount of permanent parking in Westgate.

By early 2011, half of that money went back to Ellman's lenders as part of a deal to try to keep the Coyotes in Glendale, while the city received the other $12.5 million in the account.

What a mess.  This is what happens when politicians try to be bigshots with our money.

It is becoming increasingly clear that it is impossible to calculate exactly what you owe to the IRS (even the IRS will not take responsibility for what their customer support people tell you that you owe).  Given that, one can't really know his or her tax burden for sure until and unless one is audited and the case is adjudicated.  Doesn't this put the tax code in violation of the Constitution's prohibition of ex post facto law?

For years now I have lampooned the crazy money Glendale, AZ has thrown at the Phoenix ice hockey team in a desperate attempt to trade taxpayer money for prestige.  Let me bring you up to date:

Years ago a town of about 250,000 people committed about $200 million in taxpayer money to build a stadium for a professional ice hockey team, to attract it away from Scottsdale or downtown Phoenix to what is frankly the ass-end of the metropolitan area  (I have no problems with the west side of town, but from a geographic, demographic, and economic logic standpoint this was roughly equivalent to moving the LA Lakers to Riverside or San Bernardino).

For some weird reason, moving an ice hockey team to the desert with no base of hockey fans and locating it a good 45 minutes from the wealthier parts of town caused the team to go bankrupt.  Lots of people were willing to pay good money to haul the team back to Canada where there are, you know, ice hockey fans, but few wanted to pay good money to keep it on the west side of Phoenix.

So enter the NHL, which took the team over.  The NHL commissioner promised the other owners that it would not lose money on the deal, so it set the price of the team not at the market price (which appears to be around $100 million based on the Atlanta sale) but based on its costs, which were about $200 million.   It has agreed to try to keep the team in Glendale, but only if the city covers its operating losses of $25 million each year, which incredibly, the city has done for two years (note this is $100 a year for every man, woman, and child in the city to subsidize a hockey team).

The team may be worth $200 million in Canada, but it is only worth $100 million in Glendale (at most) so it does not sell.  The city agreed to make up the $100 million difference  with a bond issue (and throw another $90+ million in to boot), which almost closed the deal with one buyer until the Goldwater Institute pointed out that this kind of subsidy was illegal under the AZ constitution.  And so the situation sits.  The asking price is still $200 million, which no one will pay if they have to keep the team in Glendale.  And the city keeps forking over $25 million a year to the NHL to keep the team running.

OK, so that is the background.  Here is the new news.

The league, which purchased the Phoenix Coyotes at a bankruptcy court auction in 2009, has been managing the team and city-owned arena until an owner willing to keep the team in Glendale can be found. The city paid $25 million to the NHL during the 2010-11 season and pledged another $25 million for the current season, which is expected to come due in May.

To fulfill that pledge, the city put $20 million in escrow and still needs to come up with $5 million.

The hefty payouts have nearly drained the city's reserves, leading to a recent drop in the city's bond rating.

And the city is looking at a deficit next fiscal year that one councilwoman has estimated could reach $30 million. A possible sales-tax hike, furloughs and program cuts are on the table to close the spending gap....

During Tuesday's budget talks, [Glendale Mayor] Scruggs asked council members to join her in signing a letter to NHL Commissioner Gary Bettman to "release us from that $20 million in escrow and let us pay over time."

None of the councilmembers responded to her request. Councilman Manny Martinez later told The Republic he would "have to think about it in light of what is going on."

Scruggs said if the city can get back the $20 million from escrow and pay the NHL an initial $5 million, "our problems and everything our employees are fearful of would pretty much go away."

Translation:  Dear NHL, we are idiots and committed a bunch of money to a stupid purpose that we can't really afford.  Would you pretty please let us out of our commitment?  Hilarious and pathetic.  The chickens are coming home to roost by the millions.

Even funnier, the Glendale mayor is trying to blame the NHL for bad faith

The mayor said she and four others councilmembers pledged the second payout last May because city staff and NHL Deputy Commissioner Bill Daly said a deal with a team owner was nearly complete and that "we should never have to pay that $25 million."

Scruggs said the city was told the money was just a place holder so that the NHL wouldn't move the team out of Glendale.

"Given the stress that our budget is under, there should be a payment plan developed," Scruggs said. "They have no right to that money. They held us hostage for a year."

She said the NHL never intended to do business with Chicago businessman Matt Hulsizer, who wanted to buy the team but walked away from the negotiation table in frustration just weeks after the council pledged the second payment to the NHL....

Scruggs said the NHL last spring "misled us and they can't do this to our city."

In fact, the NHL was totally serious about the Hulsizer deal.  That deal fell through not because the NHL screwed up, but because Glendale did.  The deal fell through because Glendale had committed to a subsidy of the deal which may not have been Constitutional, and even if it had proved legal, became impossible when Glendale's bond ratings started tanking and they realized they could not move the paper.  Glendale officials have been amateurish and dishonest through this entire process.

By the way, several years ago, Jim Balsillie offered a deal worth over $200 million for the team, PLUS he offered to pay off something like $150 million of Glendale's stadium debt.  Glendale opposed the deal, because they would have been left with an empty stadium and tens of millions in debt (given the crash in RIM's fortunes, the offer is unlikely to be renewed).

Glendale is likely going to wish they had taken the first offer.  There is a very good chance that Glendale will lose the team without any sort of payment on their debt and after paying $25 million a year to the NHL.  Glendale will end up with hundreds of millions in debt, an empty stadium, a junk-level bond rating and a busted budget.

There is a saying in the investment world - your first loss is your best loss.  Glendale is about to learn this very expensive lesson.